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Wednesday, February 29, 2012

GLOBUST GOES PUBLIC

Finally, our lovable commentator has had his wish granted, Globust Goes Public? NOT! Just kidding! Gotcha, didn't we? We'll have to spare the celebratory non-sense for another day. Would TSB have a shot at underwriting Globust? Highly unlikely. Anyway back to the real story.....

It was reported on February 28th, 2012 in a publication named Med City News that an "Orthopedic Device CEO was fined for distributing products without the FDA's approval." It seems like the FDA has reached a civil settlement with Globust (We haven't gone public.......yet) Medical for distribution of unapproved medical devices. Seems like the mighty Globust is just a wee bit lighter in the pocket having to cough up $550,000 for the penalty, while David C. Paul, the firm's CEO had to personally cough up $450,000 for a total of $1 million.

During an inspection, and as required by law, back in 2010 FDA investigators had learned that the company had marketed its NuBone OSTEO.....INDUCTIVE product without pre-market approval or clearance as required by law. In January 2009, the GLO-BUST had sought clearance, but the FDA had declined the request citing that the product was not substantially equivalent to legally marketed products, but it seems GLOBUST continued to do so even after receiving the letter.

The result? The FDA then filed a complaint for civil monetary penalties against GLOBUST and the company's CEO. Of course, what other recourse or action was left for the FDA? When someone says no, it doesn't mean yes. Now TSB is not even going to attempt to figure out how to state the word no in the Indian Language considering that the last time we studied about our Indian Brethren there were at least 110-115 languages spoken. But no is no. So here are some other ways that the FDA could have conveyed its message;

Wonder if old Dave had to cough that up out of his personal account or did the company spring for his faux pas, anyway, looks like his assistant Tatoo might not be accompanying him on his next go round when he walks the trade shows. Until, then you know what Earl King would sing;

People see me but they just don't know, What's in my heart and why I love you so
I love you baby like a miner loves gold, so come on baby let the good times roll
Love is nice when its understood, its even better when you're feeling good
You got me flipping' like a flag on a pole, so come on baby let the good times roll

Oh you poor baby, considering this doesn't cost you jacksh&t you sure bitch like a little girl. But then again what does it say about some of you? At least this site reports the good, the bad and the ugly about our industry

Actually the demand for quality information is good. It keeps MM on his toes and causes him to strive to provide his readers with thoughtful and provocative subject matter regularly. Being free has nothing to do with it. You think MM believes since it's free he has to put less effort into his site? Sounds like you're the one who's expectations are relative to the value you pay. Bet you only wear Armani suits? Or Hickey Friedman? Have you not learned anything about quality vs. cost?MM must be held accountable for his output. Praise when he does it right and reminders when he doesn't.Sounds like you have a room full of unearned trophy's.

So thats how Globus does their custom instruments, they send demos and they end up in surgery.... No wonder they can get customs done so quickly, no design controls and no approvals...After the DePuy warning letter for customs, the FDA should do look at the Globus customs process.

The Globus rep in my area gives her surgeons almost nothing but custom instruments, and she brags to me about how fast she can have them made every chance she gets. She claims that it only takes 3-4 days to get any custom made no matter how big or complex.

Companies should be required to have the word "DEMO" printed or laser marked onto every demo instrument they produce (I don't know of any other company that actually makes full scale demo instruments aside from Globus). I guess it should also be required that the word "DEMO" printed on each instrument should be large enough to be visible to the naked eye. You know Globus...without this being a requirement, they would try to make it so tiny that you would need a microscope just to see it.

You mean my "Hickey Friedman" suit is a knockoff? And I thought I got a good deal. Please don't tell me my "Romex" watch and "Calligulaway" driver aren't authentic. But hey, with ASP dropping, PODS and CAP pricing, I have to cut corners somewhere. The Chinese toothpaste, baby formula and dog food turned out to be a bad idea. Poor Fido!

Is it too much to hope that if CEOs now have to pay for the wrong doings they approve, that it will curtail the practice? Like Alphatec hiding Puregen in the back of the booth until after the Wednesday morning walkabouts were finished at AAOS. Did the CEO know? 3 guesses and the first 2 don't count.

Ha! couldnt happen to a nicer group of folks. Globus is the poster boy company for unethical douchebags wearing the clever disguise as born-again Christians. Lets hope this is the tip of the iceberg...

Ain't it funny how the most zealous Bible-thumpers are the ones with laptops full of kiddie-porn?

Globus has made a business of identifying emerging trends in the market and quickly exploring the IP and patents surrounding the technique or device, with the purpose of finding a legal work a round to bring their version to market within a year. It is easy to identify when you look at some of the products: Continental ALIF spacer- similar in many ways to DePuy, Transcontinental- Nuvasive Coroent, Providence ACDF plate- DePuy Skyline, Coalition- Synthes the list goes on and on. When they do get caught in IP damages they just put the device in question into a different set and site surgeon preference I.e. Mars aux- curved perc rods in a retractor set? Still feeling the sting from the medtronic lawsuit huh? "Coalition has teeth not keels, if we say keel medtronic will have us again!" It's unfortunate however as I do believe Globus has good people working for them on the engineering side, but they are beholding to who cuts the checks.

ATEC is making progress at least. Struggling to make a profit, but looks better than previous quarters and revenue growth is something the big boys can't brag about last year. There is definitely a shift going on from Legacy companies to the smaller players. It will be interesting to watch as time goes on to see if it continues.

The shift to the newer players is being driven by capable agents leaving the legacy companies and working with smaller companies. Why work for the legacy players and make 10-15% when you can earn more than double that with a good independent company for the same work? This is the real reason the big guys are losing share - they just don't want to talk about it.

No doubt thats the reason for the shift. If I was Medtronic, I'd pay 6.5% too until the pendulum started to swing too far, then I'd up the comp plan to keep people thinking I really appreciated them. Wait, they did that last year so it must be about time to cut commissions again with some bogus attainment bonus that nobody can hit on products that aren't released or that don't have any data to support their use. Plus, times are tough, we need you sales guys to take one for the team so we can continue to invest in developing new products. Bwahahahah!!

Those dolts don't realize that if they teamed up and went indie, they could all make at LEAST double what they currently make and not violate their non-compete since they can cross cover for their partners for a year. If you stay with a company like that for the stability, you're in the wrong business.

Depuy pays distributors 17.5 but they don't have many left. They will be at 12.5 like Synthes. Nobody pays benefits to independent distributors. And I don't consider Globus and Nuvasive legacies. Stryker is questionable on the legacy list.

I distribute for them and I can assure that NO ONE in my territory, rep or doc, would agree with your assertion that I have become scum. They have made some bad decisions that I don't agree with, but my business has been run completely above board and I have grown the business because their products are better than most and we deliver service the legacy companies can't touch.

I'd be interested to know what company you work for. My guess is I could find some dirt on them as well. Your customers judge you for who YOU are, not the company whose name is on the tray. I worked for a legacy company whose decisions killed people for the almighty dollar, far worse than anything you can say about ATEC or many other smaller companies.

Maybe you can explain your thoughts on them being bought. I'm sure the TSB nation is on the edge of their seats to know your thoughts on how the market works and what the leaders are thinking.

Agree. ATEC not bad compared to others same & larger. I also carry most of their line and have no more and often less worries than top 5 I previously carried. I gave them a go years ago but needed more. Honestly, when I revisited them little more than year ago; I was surprised how far they grew in product and biologics. They're not perfect but good enough for my business without setting up consulting deals. I know they dabble with a small number of POD's but not disrupting my 3 guy accounts. Credit them for where they are now verses 5 years ago.

Every dirtbag mentioned in the recent WSJ article sold Alphatec product. They sell to every POD in California including Phygen. They were also the supplier of Omega which was the POD the WSJ wrote about a while back. They are working with every low life in the industry. You may be above board and a great guy but the company you sell for is not. They are one of the worst run companies in the industry and launch crap products...where is GLIF, osseoscrew, Osseofix....? Did they fix the issue with Trestle screws backing out all the time? Their reputation in their home territory is awful with a majority of their business in so cal going through PODS or companies like Phygen which they don't consider to be a POD.

MM why do you dislike Globus so much? Are they any worse than any other spine manufacturer out there? The way I see it, every spine companies Corp HQ is made of glass, do any of them have the right to throw stones? Don't hate the player, hate the industry.

As someone who follows this blog, it is entertaining whenever people comment that this blog is losing its touch, so here is my question to these people, why are you reading it and commenting? As someone previously stated, you don't pay to access information like the sit and paste sites of OTW , Orthoworld and Orthos Spine News. God forbid any these other sites take a legitimate position on anything. At least this site has the gumption to take a position on an issue affecting our industry. Isn't this news when a company does something wrong and is caught? Here's my take the self-righteous are those that complain about biased reporting, about attacking the party in question. Some of you may think that its OK to behave like David Paul or Alex Lukianov, but eventually those people start believing that they walk on water only to end up growing in their own bs.

My indictment of 7:44/3:41 and the like isn't that they should sit silent and be happy to have this 'free' resource. TSB should be critiqued if his followers see him lower the standards that he himself has set. He earned'em, he needs to keep'em.

The reason these guys seem like grade-A tools is that they are lazy! At least a troll makes some effort to let the world know what a shallow existence they inhabit (and you have the benefit of seeing them coming). These guys aren't 'self-righteous, they're weak!

Like so much of America's e-culture, while it can take a lifetime of effort and sacrifice to be recognized as an expert in your field, it takes a working internet connection and the most basic English comprehension skills to let them know they suck.

Most of us have had average to middling lives up until now and most of us will likely have average to middling lives until we die, much like we post, anonymously. Strange as it sounds, I get the perverse satisfaction someone has in publicly letting talent and success know they think they're terrible. What I don't get is doing so in such mundane, irrelevant way.

"This post was a TSBust"

"TSB is losing his touch. So boring. Zzzzzzzzzzz....."

Put a little effort into it boys. How about you answer the question WHY?

I've noticed the slide in the blog. However, I would hang as much on TSB's lack of substantive, fresh content as I would on the growing worthless, throw-away commentary.

So do us all a favor, the next time you come home from 10 hours of taking !#$% from your docs, OR coordinators, and managers and you want to rage against the machine with some trivial, inconsequential rant on TSB: DON'T!

And if you still want to, why not show us what all that upbringing and education actually got you.

Has anyone out there seen some of the latest Medtronic dirty tricks by that go something like this:

Go to a small hospital and negotiate a supply contract, including loyalty/volume rebates. Buy loyalty of key surgical committee members by providing consulting/research agreements. Make sure that the purchasing and O.R. staff get a piece of the rebate action. An underpaid clerk in purchasing is willing to do a lot to preserve his $5K rebate check.

Now the well-motivated staff excludes all other companies – even when the surgeon legitimately requests another product. Non-MDT systems get lost at the dock, calls from non-MDT reps don’t get returned, non-MDT reps get harassed and excluded from the OR. They will even put ridiculous requirements on non-MDT product like requiring peer-reviewed prospective studies proving superior outcomes of your cervical cage.

MDT is desperate to hold onto their share and will use every dirty play in the book to exclude competition. They tend to target smaller, distressed hospitals willing to sell their souls to MDT. One hospital recently held a kangaroo court, where all the non-MDT companies could come in and bid – only to learn the requirements were basically impossible to meet. How can they get away with this stuff?

MDT is clearly hurting as evidenced by 9% drop in spine. It's only going to continue to fall. And when the CEO is willing to concede to analysts that divesting is a possibility (even thought it will probably never happen), it's only going to get reps leaving faster and bringing their relationships to smaller companies. I'm actually amazed they only dropped 9% the way this market is going.

"The article said Ishrak’s comments implied a dramatic change of some sort is needed in the spine business when he said, “While we continue to believe in the potential of this market, we urgently need to see meaningful signs of improvement from our current initiatives. If we do not, we will need to reassess our strategy and approach for this business....

While International Spine sales increased 7 percent as reported, U.S. Spine revenue of $784 million fell 9 percent as reported.

And revenue from Biologics – also based in Memphis – was $188 million, a 20 percent decline on a constant currency basis, driven by declines in U.S. sales of Infuse and partially offset by revenue growth in other Biologics."

What does it tell you when the world's largest device manufacturer states that if 'current' initiatives don't sustain the spine biz they'll explore options?

Where's the discussion on how they plan to use their dominate market position and considerable resources to innovate, acquire and grow OUS markets to a future of sustainable growth in spine?

Much can be parsed, but this is rather somber news indeed.

My take, MDT exiting a surgical market as large as global spine is almost antithetical to the company's mission. To not, at a minimum, infer a creative strategy for the business demonstrates how damaging spine's last 5 years have been on MDT corp. It appears poor acquisition strategy (e.g. Kyphon), shaky commercial/clinical ethics (e.g. inFuse), average execution, and an inability to markedly move the needle on patient outcomes through innovation seems to be even more antithetical to the company's core values than exiting the market (e.g What are their pioneering technologies being utilized in Europe, Asia or Brazil? Seriously, what are they? Anyone?).

At ~20% of the company's total revenues this ain't peanuts. But of the top three vehicles for a company to make demonstrative shifts in strategy recruiting a CEO from the outside has to be one or two.

Parting thoughts:

1. If MDT were (unfathomably as it seems) to fully exit spine it's hard to imagine a greater critique of the market's future.

and

2. Grafton anyone?! No seriously, I need to move some Plexur now...anyone?

Responding to 6:41 AM- What you are essentially describing is a single source acquisition agreement between a hospital and a manufacturer. Happens all the time and MDT is not the only player that does it. I assume that if you represented a company that had the breadth of line to be in a position to make a similar proposal at more compelling terms, you’d have a different opinion.

Your assertion that “purchasing and O.R. staff get a piece of the rebate action” is ridiculous, unless the hospital has some internal incentive program that pays personnel for insuring compliance to the agreement or achieving some other benchmark. MDT is certainly not paying any rebates directly to any of these people.

Yes, I represent MDT, but share your frustration when I encounter similar agreements or the “New Tech Committee” that has a singular mission of keeping all new products out and maintaining the status quo. But hey, I’ve been doing this for 20+ years and the competition is tougher than ever. For instance, I never thought I’d be competing against PODs. Talk about the deck being stacked…I was recently asked by an acquaintance who was interviewing for a spine sales position in a market where the company had minimal presence what I thought of the opportunity. I told him to “run”. The odds of going from zero to success in this market, while not impossible, are very low.

That said, can we please get back to bashing NUVA and Globus and leave MDT to lick our wounds?

The assertion of the hospital staff "getting a piece of the rebate action" is perhaps not true, however there are frequently bonuses and big incentives tied to the staff's adherence to the GPO contracts.

Does anyone know if NuBone was actually implanted without FDA clearance???

Getting sterile, packaged product out the door demonstrates either a lack of basic commercialization SOPs or a disregard for said SOPs. I'm thinking rogue Product Manager trying to strategically place inventory in the field on the hopes of a pending clearance.

Now, if this product actually found its way into patients, the mind reals with the levels of complicity and culpability within the organization. We're talking Regulatory Affairs, Legal, Quality, Marketing and Sales management directly or (harder to imagine) indirectly involved. That's a lot of people. People with careers on the line.

I'm just not sure how this even happens? Not to mention the forseeable damage it would cause with your relationships with FDA reviewers and future submissions to CDRH.

"Now, if this product actually found its way into patients, the mind reals with the levels of complicity and culpability within the organization. We're talking Regulatory Affairs, Legal, Quality, Marketing and Sales management directly or (harder to imagine) indirectly involved. That's a lot of people. People with careers on the line."

We are talking about Globus after all,, aren't we? Regulatory, Legal, Quality? DO they actually exist in Audobon? How many lawsuits has Globus already been involved in with regards to just patent infringment,, 3, maybe 4? Would they be if these departments were doing their job? as for careers on the line,, Hasn't eveyrone there simply been sold a "bill of goods"? Globus is a company that's made A LOT of promises to its employees, mostly regarding being stock holders and having a big payday,, Anyone still that will happen? Bottom line, David Paul runs things the way that he wants to and the carnage heaped upon this company over the last few years is the direct result.

My comment was that this particular bolg post was not up to standards that I expect. Everyone has a bad day so its not a big deal. I'm hardly attacking just commenting.

I thought it was weak because the pun was way overplayed, lacked true thought and was all around lazy.

It does not have the same tone and style of MM and feels more like an article thrown together last minute after nearly 10 days of nothing.

How about a threat about all the doctors that got arrested for fraud over the past week. I believe in Texas and NY. It was not spine related but goes to show you the entire system has decayed...not just spine.

As far as the above posts about MSD and their contracts; I worked there a number of years ago and thats how we would lock down business.

Now suppose if the surgeons are not "consultants" but the hospital has a gain sharing model. Could be an indirect kick back to the surgeon.

Company A saves hospital $300,000. MD's get 5% of savings..and blamo...MD receives $15,000.

Does surgical volume increase too???

A hospital of mine has a similar agreement except the $$ from savings goes to the department for equipment and such.

Can it be frustrating to compete against this? yes! Does it suck? Yes.

My outfit competes against this every day and we are slowly but surely taking business.

Hospitals are getting smarter and smarter and realize that competition is good. Most products have become commoditites. Service will win the day.

Solid territories are not built in a day. It takes years to do it right. Find a company willing to invest in YOU the sales professional and you'll be successful. If they are looking for someone to come with zero dollars and grow it to a million in a year...find another outfit.

Globus has no presence in my territory, but whatever I do see from them is always pretty slick. I'd be nervous if their product line was in the hands of a more respected group/company. Great products, bad reputation...even docs say it

Back to the original topic, is this the end of this investigation or the tip of the iceberg? The $1M penalty was from the FDA and not the DOJ and it was for marketing an unapproved device. Will the DOJ now get involved due to the product being used on Medicare patients? If Globus was representing the product as an approved device then you've got to wonder if the False Claims Act is going to come into play. If so, you're looking at potentially tens of millions and not just a million in fines/penalties. Stay tuned for the continuing saga of This is Globus' Life....

What happened to the GS Medical comment? I went off to look at the Corrance back story, got back and it had gone. Well done MM you're clearly policing the site.

Its a shame however because in this case he wasn't far off the mark, clearly he'd never use the GS system because when you receive the set is when your problems really start..! Nothing fits, instruments don't fit implants, set-screws don't fit screws, Its cheap because its nasty

Yes, Management is a nobody Team from loser companies. What do you expect from a Asian based company trying to look like a USA company. I would never consider their products even if commissions were 50%!

I am a junior rep with 2 years experience. Relocating so Non-competes not going to be an issue. Advice given to me so far, take a pass on Medtronic, pass on Depuy as they are all going direct and cutting reps . Synthes is gone. Pass on Zimmer , not enough products, Pass on Globus, allegedly being investigated. for the positives, I have been told Stryker is good, also K2 is growing strong, and at my experience level starting up with Lanx or Pioneer is a good place to be. Biomet ? Nuvasive?

It all depends on the local market in your destination city. Although i would imagine you would be facing a considerable struggle starting over in a new place. Good luck. (i vote nuva though if all things are equal.)

You are a junior rep with 2 years of experience and you have to ask a blog site advice on your competition. I hire reps and you would not pass the first interview. That is why you are still a junior rep. My advice is keep covering cases and running sets. Learn your competition and practice your interviewing skills.

WOW, You have that WOW Factor. You hire reps?? and you say I would not make it past Mr Wow's first interview? The one where you pull up to the meeting place in your cleanly washed Beemer. Then you walk in late and apologize to me for being late, YOU had to manage a "crisis" with your surgeon who's a good friend and calls you five times a day. WOWZA.. I sit with my resume and stare in complete awe.. Master of the Universe sits before me. -- I guess asking long time veteran reps who have been in the industry for 8 or more years was a silly idea. You do not need to ask advice to anyone. You are an Island. You have it all under control. WOW !!!! (By the way, I bet I my undergrad and Masters degrees are from schools that rejected your application. )

so why is the Depuy manager going around stating that he will cherry pick the synthes reps that can bring over business and drop the rest. when the depuy side of the merger controls your future, your gone

Well the only way your gonna get a job with LANX is if your an ex Nuvasive employee. They are hiring by the dozen (literally). And giving 400000 sit out bonuses hoping all their distributors wont notice. They have sold out all their distributors in TEXAS to James Green and about to do the same in Florida with Chris Walsh. If you were a loyal employee with LANX beware- Nick Ansari is coming to replace you with a hope and a promise from a purple clown. If you distribute LANX i have one word for you"diversify"!

That must be the joke of the decade. FDA are wussies. Every breaking of the law by DP and his cronies is intentional. Every time they do it they calculate whether the risk will pay off, and so far it has: a measly 13 million to Synthes and a paltry 1 million to FDA. The returns were at least 10 fold. The DOJ or IRS should take some real action.

The funny thing is that Dr. Bae's lab showed that Nubone only worked 12% of the time on even rats. Advice to Globus is, if you are going to stick your neck out, make sure it works. That company is not one I'd be purchasing Biologics from.

I hear so many different comments on compensation. Anyone in the know, please respond. I work for a Zimmer distributor and get paid 10%. I don't know what the Distributor actully gets. I always wondered. Anyway, I have built solid relationships and am looking to move. But I hear compensation rates all over the board. I know the lines of the top 7-10 and just looking for max %. I don't need benefits. Thanks.

7-15% depending on who you work for....if you have to have the name badge because you can't sell I.e. Medtronic....you'll get 7 because you don't do anything but cover cases...however since you actually sell something at a smaller company you can make twice (no amazing name badge). Pretty much comes down to this. (no nuts mdt, small company - all you no help - bigger %). Good luck

This looks like a cash pay hospital in Cyprus. Their sites remeinds me of the NuVa site. Based on the surgeons involved in this, the technology they are promoting, and the links to videos, is NuVa involved in this organization? Something is going on here....Thougths?

Boy...Columbo you are not. Just look at the "founder surgeons". It's just a medical tourism surgery center at it's finest. These are all over the world and nothing is illegal about that. NuVa just put a bunch of money into it. Hey...I hate NuVa and everything they are about but there is no smoking gun here.

Really.... 2:28 u have that after Nuva sells itself out for everyone in SOLASSSSS to join Dr. Smith in his overseas adventures for Nuva inventory sales? How is this hard to explain?

SIMPLE idiots. Surgeon in a location with tough competition finds a travel destination that pays cash. He asks around, including third world interests, for products. Nuva steps up with cheap ass products and enlists all the SOLASS members to the MISSION....

Genius... Absolutely. Fits the plan of top line revenue with a HUGE LOSS every quarter.

When will everyone see Nuva has no idea how to run a business........????

Like Forbes even has a clue as to what it's like to work in the field as sales rep for a medical device company. The list you're referring to would only apply to the internal workforce of the companies named.

Wow! These Amedica folks can't seem do anything right! They specifically refer to the Procet implant in the press release as a product that can be delivered "percutaneously". Have these guys been living under a rock? Are they not aware of the big lawsuit between Minsurg International and about 15 other companies that were trying to rush facet dowel systems to market back in late 2010 and early 2011? The whole premise of the lawsuit was that Minsurg owned the IP for facet dowels that are placed via a percutaneous approach. This is what won the lawsuit for them since almost all of the accused companies were marketing their systems as either "percutaneous" or "MIS". With this precedent already in place, it won't take long before Minsurg once again lays the smack down in the court of law.

Your surgeon is not "Old" school. You are a tool and do not know how to sell. How did you even get through high school without being able to do research? Damn has this industry diminished rapidly in quality representation.

I am graduating from Junior College in May and my grandpa is the surgeon. He is hiring me to be his distributor. Sorry for the lack of knowledge, I have never worked or studied spine. My grandpa told me to find a DBM that pays high commissions.

I've been following this blog and researching on how to become a rep and my associates degree seems like the best bet. My advice to other aspiring reps is that you can get some really solid sales experience selling kimberly-clark toilet seat covers for a year or two

He then told me to call the guys at G Surgical out of Georgia and pickup the hardware line. I don't really like this, but he told me I have to split everything with him. I am going to use the money earned to go to cooking school, I hope I make enough for 18 months of tuition and books.

This is awesome. All the companies are guilty of all the same shit. Get over it. I'm sure while you guys are wasting time writing on this blog, the Globus rep is out kicking your ass. Most of their reps are amazing and actually show up to surgeries and follow through and are available when needed which is not true for many DePuy and Synthes reps. I've heard the stories...just accept the fact that they are not going away and their products, whether me too or not, work better and are more user friendly than most legacy products.